Golden Parachute
Definition
A golden parachute is a contract that pays a company’s executives large severance packages if the company is taken over and they lose their jobs. It is part protection for managers, part defense, since it raises the cost of an acquisition.
In practice
Parachutes are usually framed as aligning management with shareholders during a sale: an executive who will be paid either way has less reason to fight a good deal. Critics see rewards for failure. In practice they are now standard, and rarely large enough to stop a determined buyer.